EXHIBIT 99.1
INTERNATIONAL FLAVORS & FRAGRANCES INC.
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2000 SUPPLEMENTAL STOCK AWARD PLAN
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INTERNATIONAL FLAVORS & FRAGRANCES INC.
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2000 SUPPLEMENTAL STOCK AWARD PLAN
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1. Purpose............................................................ 1
2. Definitions........................................................ 1
3. Administration..................................................... 2
4. Stock Subject to Plan.............................................. 3
5. Eligibility ....................................................... 3
6. Specific Terms of Awards........................................... 4
7. Certain Provisions Applicable to Awards............................ 7
8. Change in Control.................................................. 7
9. Additional Award Forfeiture Provisions............................. 10
10. General Provisions................................................. 12
INTERNATIONAL FLAVORS & FRAGRANCES INC.
2000 SUPPLEMENTAL STOCK AWARD PLAN
1. PURPOSE. The purpose of this 2000 Supplemental Stock Award Plan
(the "Plan") is to aid International Flavors & Fragrances Inc., a New York
corporation (the "Company"), in attracting, retaining, motivating and
rewarding employees, other than executive officers and directors of the
Company, and certain other persons who provide substantial services to the
Company or its subsidiaries or affiliates, to provide for equitable and
competitive compensation opportunities, to recognize individual
contributions and reward achievement of Company goals, and promote the
creation of long-term value for shareholders by closely aligning the
interests of Participants with those of shareholders. The Plan authorizes
stock-based incentives for Participants.
2. DEFINITIONS. In addition to the terms defined in Section 1 above
and elsewhere in the Plan, the following capitalized terms used in the Plan
have the respective meanings set forth in this Section:
(a) "Award" means any Option, SAR, Restricted Stock, Deferred
Stock, Stock granted as a bonus or in lieu of another award,
Dividend Equivalent, Other Stock-Based Award, or Performance Award,
together with any related right or interest, granted to a
Participant under the Plan.
(b) "Beneficiary" means any family member or members,
including by marriage or adoption, any trust in which the
Participant or any family member or members have more than 50% of
the beneficial interest, and any other entity in which the
Participant or any family member or members own more than 50% of the
voting interests, in each case designated by the Participant in his
most recent written Beneficiary designation filed with the Committee
as entitled to exercise rights or receive benefits in connection
with the Award (or any portion thereof), or if there is no surviving
designated Beneficiary, then the person, persons, trust or trusts
entitled by will or the laws of descent and distribution to exercise
rights or receive benefits in connection with the Award on behalf or
in lieu of such non-surviving designated Beneficiary.
(c) "Board" means the Company's Board of Directors.
(d) "Change in Control" and related terms have the meanings
specified in Section 8.
(e) "Code" means the Internal Revenue Code of 1986, as
amended. References to any provision of the Code or regulation
(including a proposed regulation) thereunder shall include any
successor provisions and regulations.
(f) "Committee" means a committee of two or more directors
designated by the Board to administer the Plan; provided, however,
that, directors appointed or serving as members of a Board committee
designated as the Committee shall not be employees of the Company or
any subsidiary or affiliate. The full Board may perform any function
of the Committee hereunder, and the Committee may delegate authority
as provided in Section 3(b), in which case the term "Committee"
shall refer to the Board or such delegee.
(g) "Deferred Stock" means a right, granted to a Participant
under Section 6(e), to receive Stock or other Awards or a
combination thereof at the end of a specified deferral period. Such
Awards may be denominated as "Restricted Stock Units" as well.
(h) "Dividend Equivalent" means a right, granted to a
Participant under Section 6(g), to receive cash, Stock, other Awards
or other property equal in value to all or a specified portion of
the dividends paid with respect to a specified number of shares of
Stock.
(i) "Effective Date" means the effective date specified in
Section 10(o).
(j) "Eligible Person" has the meaning specified in Section 5.
(k) "Exchange Act" means the Securities Exchange Act of 1934,
as amended. References to any provision of the Exchange Act or rule
(including a proposed rule) thereunder shall include any successor
provisions and rules.
(l) "Fair Market Value" means the fair market value of Stock,
Awards or other property as determined by the Committee or under
procedures established by the Committee. Unless otherwise determined
by the Committee, the Fair Market Value of Stock shall be the
closing sale price reported on the composite tape of the New York
Stock Exchange on the day as of which such value is being determined
or, if there is no sale on that day, then on the last previous day
on which a sale was reported.
(m) "Option" means a right, granted to a Participant under
Section 6(b), to purchase Stock or other Awards at a specified price
during specified time periods.
(n) "Other Stock-Based Awards" means Awards granted to a
Participant under Section 6(h).
(o) "Participant" means a person who has been granted an
Award under the Plan which remains outstanding, including a person
who is no longer an Eligible Person.
(p) "Performance Award" means a conditional right, granted to
a Participant under Section 6(i), to receive Stock or other Awards
or payments, as determined by the Committee, based upon performance
criteria specified by the Committee.
(q) "Restricted Stock" means Stock granted to a Participant
under Section 6(d) which is subject to certain restrictions and to a
risk of forfeiture.
(r) "Stock" means the Company's Common Stock, and any other
equity securities of the Company that may be substituted or
resubstituted for Stock pursuant to Section 10(c).
(s) "Stock Appreciation Rights" or "SAR" means a right
granted to a Participant under Section 6(c).
3. ADMINISTRATION.
(a) Authority of the Committee. The Plan shall be
administered by the Committee, which shall have full and final
authority, in each case subject to and consistent with the
provisions of the Plan, to select Eligible Persons to become
Participants; to grant Awards; to determine the type and number of
Awards, the dates on which Awards may be exercised and on which the
risk of forfeiture or deferral period relating to Awards shall lapse
or terminate, the acceleration of any such dates, the expiration
date of any Award, whether, to what extent, and under what
circumstances an Award may be settled, or the exercise price of an
Award may be paid, in cash, Stock, other Awards, or other property,
and other terms and conditions of, and all other matters relating
to, Awards; to prescribe documents evidencing or setting terms of
Awards (such Award documents need not be identical for each
Participant), amendments thereto, and rules and regulations for the
administration of the Plan and amendments thereto; to construe and
interpret the Plan and Award documents and correct defects, supply
omissions or reconcile inconsistencies therein; and to make all
other decisions and determinations as the Committee may deem
necessary or advisable for the administration of the Plan. Decisions
of the Committee with respect to the administration and
interpretation of the Plan shall be final, conclusive, and binding
upon all persons interested in the Plan, including Participants,
Beneficiaries, transferees under Section 10(b) and other persons
claiming rights from or through a Participant, and shareholders.
(b) Manner of Exercise of Committee Authority. The Committee
may delegate to officers or managers of the Company or any
subsidiary or affiliate, or committees thereof, the authority,
subject to such terms as the Committee shall determine, to perform
such functions, including administrative functions, as the Committee
may determine. The express grant of any specific power to the
Committee, and the taking of any action by the Committee, shall not
be construed as limiting any power or authority of the Committee.
(c) Limitation of Liability. The Committee and each member
thereof, and any person acting pursuant to authority delegated by
the Committee, shall be entitled, in good faith, to rely or act upon
any report or other information furnished by any executive officer,
other officer or employee of the Company or a subsidiary or
affiliate, the Company's independent auditors, consultants or any
other agents assisting in the administration of the Plan. Members of
the Committee, any person acting pursuant to authority delegated by
the Committee, and any officer or employee of the Company or a
subsidiary or affiliate acting at the direction or on behalf of the
Committee or a delegee shall not be personally liable for any action
or determination taken or made in good faith with respect to the
Plan, and shall, to the extent permitted by law, be fully
indemnified and protected by the Company with respect to any such
action or determination.
4. STOCK SUBJECT TO PLAN.
(a) Overall Number of Shares Available for Delivery. Subject
to adjustment as provided in Section 10(c), the total number of
shares of Stock reserved and available for delivery in connection
with Awards under the Plan shall be 4.5 million shares Any shares of
Stock delivered under the Plan shall consist of authorized and
unissued shares, unless the Company's General Counsel determines
that treasury shares shall be delivered under the Plan.
(b) Share Counting Rules. The Committee may adopt reasonable
counting procedures to ensure appropriate counting, avoid double
counting (as, for example, in the case of tandem or substitute
awards) and make adjustments if the number of shares of Stock
actually delivered differs from the number of shares previously
counted in connection with an Award. Shares subject to an Award that
is canceled, expired, forfeited, settled in cash or otherwise
terminated without a delivery of shares to the Participant will
again be available for Awards, and shares withheld in payment of the
exercise price or taxes relating to an Award and shares equal to the
number surrendered in payment of any exercise price or taxes
relating to an Award shall be deemed to constitute shares not
delivered to the Participant and shall be deemed to again be
available for Awards under the Plan. In addition, in the case of any
Award granted in substitution for an award of a company or business
acquired by the Company or a subsidiary or affiliate, shares issued
or issuable in connection with such substitute Award shall not be
counted against the number of shares reserved under the Plan, but
shall be available under the Plan by virtue of the Company's
assumption of the plan or arrangement of the acquired company or
business.
5. ELIGIBILITY. Awards may be granted under the Plan only to
Eligible Persons. For purposes of the Plan, an "Eligible Person" means a
person who is not an executive officer or director of the Company but who
is an employee of the Company or any subsidiary or affiliate, a consultant
or other person who provides substantial services to the Company or a
subsidiary or affiliate, or a person who has been offered employment by the
Company or a subsidiary or affiliate, provided that such prospective
employee or consultant or other person may not receive any payment or
exercise any right relating to an Award until such person has commenced
employment with or providing of services to the Company or a subsidiary or
affiliate. An employee on leave of absence may be considered as still in
the employ of the Company or a subsidiary or affiliate for purposes of
eligibility for participation in the Plan. For purposes of the Plan, a
joint venture in which the Company or a subsidiary has a substantial direct
or indirect equity investment shall be deemed an affiliate, if so
determined by the Committee.
6. SPECIFIC TERMS OF AWARDS.
(a) General. Awards may be granted on the terms and
conditions set forth in this Section 6. In addition, the Committee
may impose on any Award or the exercise thereof, at the date of
grant or thereafter (subject to Section 10(e)), such additional
terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall determine, including terms requiring
forfeiture of Awards in the event of termination of employment or
service by the Participant and terms permitting a Participant to
make elections relating to his or her Award. The Committee shall
retain full power and discretion with respect to any term or
condition of an Award that is not mandatory under the Plan. The
Committee shall require the payment of lawful consideration for an
Award to the extent necessary to satisfy the requirements of the New
York Business Corporation Law, and may otherwise require payment of
consideration for an Award except as limited by the Plan.
(b) Options. The Committee is authorized to grant Options to
Participants on the following terms and conditions:
(i) Exercise Price. The exercise price per share of
Stock purchasable under an Option shall be determined by the
Committee, provided that such exercise price shall be not
less than the Fair Market Value of a share of Stock on the
date of grant of such Option, subject to Sections 6(f) and
7(a).
(ii) Option Term; Time and Method of Exercise. The
Committee shall determine the term of each Option. The
Committee shall determine the time or times at which or the
circumstances under which an Option may be exercised in whole
or in part (including based on achievement of performance
goals and/or future service requirements), the methods by
which such exercise price may be paid or deemed to be paid
and the form of such payment (subject to Section 10(j)),
including, without limitation, cash, Stock, other Awards or
awards granted under other plans of the Company or any
subsidiary or affiliate, or other property (including notes
and other contractual obligations of Participants to make
payment on a deferred basis, such as through "cashless
exercise" arrangements, to the extent permitted by applicable
law), and the methods by or forms in which Stock will be
delivered or deemed to be delivered in satisfaction of
Options to Participants (including deferred delivery of
shares representing the Option "profit," at the election of
the Participant or as mandated by the Committee, with such
deferred shares subject to any vesting, forfeiture or other
terms as the Committee may specify).
(c) Stock Appreciation Rights. The Committee is authorized to
grant SAR's to Participants on the following terms and conditions:
(i) Right to Payment. An SAR shall confer on the
Participant to whom it is granted a right to receive, upon
exercise thereof, the excess of (A) the Fair Market Value of
one share of Stock on the date of exercise (or, in the case
of a "Limited SAR," the Fair Market Value determined by
reference to the Change in Control Price, as defined under
Section 8(d) hereof) over (B) the grant price of the SAR as
determined by the Committee.
(ii) Other Terms. The Committee shall determine at the
date of grant or thereafter, the time or times at which and
the circumstances under which a SAR may be exercised in whole
or in part (including based on achievement of performance
goals and/or future service requirements), the method of
exercise, method of settlement, form of consideration payable
in settlement, method by or forms in which Stock will be
delivered or deemed to be delivered to Participants, and
whether or not a SAR shall be free-standing or in tandem or
combination with any other Award. Limited SARs that may only
be exercised in connection with a Change in Control or other
event as specified by the Committee may be granted on such
terms, not inconsistent with this Section 6(c), as the
Committee may determine.
(d) Restricted Stock. The Committee is authorized to grant
Restricted Stock to Participants on the following terms and conditions:
(i) Grant and Restrictions. Restricted Stock shall be
subject to such restrictions on transferability, risk of
forfeiture and other restrictions, if any, as the Committee
may impose, which restrictions may lapse separately or in
combination at such times, under such circumstances
(including based on achievement of performance goals and/or
future service requirements), in such installments or
otherwise and under such other circumstances as the Committee
may determine at the date of grant or thereafter. Except to
the extent restricted under the terms of the Plan and any
Award document relating to the Restricted Stock, a
Participant granted Restricted Stock shall have all of the
rights of a shareholder, including the right to vote the
Restricted Stock and the right to receive dividends thereon
(subject to any mandatory reinvestment or other requirement
imposed by the Committee).
(ii) Forfeiture. Except as otherwise determined by the
Committee, upon termination of employment or service during
the applicable restriction period, Restricted Stock that is
at that time subject to restrictions shall be forfeited and
reacquired by the Company; provided that the Committee may
provide, by rule or regulation or in any Award document, or
may determine in any individual case, that restrictions or
forfeiture conditions relating to Restricted Stock will lapse
in whole or in part, including in the event of terminations
resulting from specified causes.
(iii) Certificates for Stock. Restricted Stock granted
under the Plan may be evidenced in such manner as the
Committee shall determine. If certificates representing
Restricted Stock are registered in the name of the
Participant, the Committee may require that such certificates
bear an appropriate legend referring to the terms, conditions
and restrictions applicable to such Restricted Stock, that
the Company retain physical possession of the certificates,
and that the Participant deliver a stock power to the
Company, endorsed in blank, relating to the Restricted Stock.
(iv) Dividends and Splits. As a condition to the grant
of an Award of Restricted Stock, the Committee may require
that any dividends paid on a share of Restricted Stock shall
be either (A) paid with respect to such Restricted Stock at
the dividend payment date in cash, in kind, or in a number of
shares of unrestricted Stock having a Fair Market Value equal
to the amount of such dividends, or (B) automatically
reinvested in additional Restricted Stock or held in kind,
which shall be subject to the same terms as applied to the
original Restricted Stock to which it relates, or (C)
deferred as to payment, either as a cash deferral or with the
amount or value thereof automatically deemed reinvested in
shares of Deferred Stock, other Awards or other investment
vehicles, subject to such terms as the Committee shall
determine or permit a Participant to elect. Unless otherwise
determined by the Committee, Stock distributed in connection
with a Stock split or Stock dividend, and other property
distributed as a dividend, shall be subject to restrictions
and a risk of forfeiture to the same extent as the Restricted
Stock with respect to which such Stock or other property has
been distributed.
(e) Deferred Stock. The Committee is authorized to grant
Deferred Stock to Participants, which are rights to receive Stock,
other Awards, or a combination thereof at the end of a specified
deferral period, subject to the following terms and conditions:
(i) Award and Restrictions. Issuance of Stock will
occur upon expiration of the deferral period specified for an
Award of Deferred Stock by the Committee (or, if permitted by
the Committee, as elected by the Participant). In addition,
Deferred Stock shall be subject to such restrictions on
transferability, risk of forfeiture and other restrictions,
if any, as the Committee may impose, which restrictions may
lapse at the expiration of the deferral period or at earlier
specified times (including based on achievement of
performance goals and/or future service requirements),
separately or in combination, in installments or otherwise,
and under such other circumstances as the Committee may
determine at the date of grant or thereafter. Deferred Stock
may be satisfied by delivery of Stock, other Awards, or a
combination thereof (subject to Section 10(j)), as determined
by the Committee at the date of grant or thereafter.
(ii) Forfeiture. Except as otherwise determined by the
Committee, upon termination of employment or service during
the applicable deferral period or portion thereof to which
forfeiture conditions apply (as provided in the Award
document evidencing the Deferred Stock), all Deferred Stock
that is at that time subject to such forfeiture conditions
shall be forfeited; provided that the Committee may provide,
by rule or regulation or in any Award document, or may
determine in any individual case, that restrictions or
forfeiture conditions relating to Deferred Stock will lapse
in whole or in part, including in the event of terminations
resulting from specified causes.
(iii) Dividend Equivalents. Unless otherwise determined
by the Committee, Dividend Equivalents on the specified
number of shares of Stock covered by an Award of Deferred
Stock shall be either (A) paid with respect to such Deferred
Stock at the dividend payment date in cash or in shares of
unrestricted Stock having a Fair Market Value equal to the
amount of such dividends, or (B) deferred with respect to
such Deferred Stock, either as a cash deferral or with the
amount or value thereof automatically deemed reinvested in
additional Deferred Stock, other Awards or other investment
vehicles having a Fair Market Value equal to the amount of
such dividends, as the Committee shall determine or permit a
Participant to elect.
(f) Bonus Stock and Awards in Lieu of Obligations. The
Committee is authorized to grant Stock as a bonus, or to grant Stock
or other Awards in lieu of obligations of the Company or a
subsidiary or affiliate to pay cash or deliver other property under
the Plan or under other plans or compensatory arrangements, subject
to such terms as shall be determined by the Committee.
(g) Dividend Equivalents. The Committee is authorized to
grant Dividend Equivalents to a Participant, entitling the
Participant to receive cash, Stock, other Awards, or other property
equivalent to all or a portion of the dividends paid with respect to
a specified number of shares of Stock. Dividend Equivalents may be
awarded on a free-standing basis or in connection with another
Award. The Committee may provide that Dividend Equivalents shall be
paid or distributed when accrued or shall be deemed to have been
reinvested in additional Stock, Awards, or other investment
vehicles, and subject to restrictions on transferability, risks of
forfeiture and such other terms as the Committee may specify.
(h) Other Stock-Based Awards. The Committee is authorized,
subject to limitations under applicable law, to grant to
Participants such other Awards that may be denominated or payable
in, valued in whole or in part by reference to, or otherwise based
on, or related to, Stock or factors that may influence the value of
Stock, including, without limitation, convertible or exchangeable
debt securities, other rights convertible or exchangeable into
Stock, purchase rights for Stock, Awards with value and payment
contingent upon performance of the Company or business units thereof
or any other factors designated by the Committee, and Awards valued
by reference to the book value of Stock or the value of securities
of or the performance of specified subsidiaries or affiliates or
other business units. The Committee shall determine the terms and
conditions of such Awards. Stock delivered pursuant to an Award in
the nature of a purchase right granted under this Section 6(h) shall
be purchased for such consideration, paid for at such times, by such
methods, and in such forms, including, without limitation, cash,
Stock, other Awards, notes, or other property, as the Committee
shall determine. Cash awards, as an element of or supplement to any
other Award under the Plan, may also be granted pursuant to this
Section 6(h).
(i) Performance Awards. The Committee is authorized to grant
Performance Awards to Participants. Performance Awards may be
denominated as a number of shares of Stock, shares of Stock having a
specified cash value at a future date, or a number of other Awards
(or a combination) which may be earned upon achievement or
satisfaction of performance conditions specified by the Committee.
In addition, the Committee may specify that any other Award shall
constitute a Performance Award by conditioning the right of a
Participant to exercise the Award or have it settled, and the timing
thereof, upon achievement or satisfaction of such performance
conditions as may be specified by the Committee. The Committee may
use such business criteria and other measures of performance as it
may deem appropriate in establishing any performance conditions, and
may exercise its discretion to reduce or increase the amounts
payable under any Award subject to performance conditions.
7. CERTAIN PROVISIONS APPLICABLE TO AWARDS.
(a) Stand-Alone, Additional, Tandem, and Substitute Awards.
Awards granted under the Plan may, in the discretion of the
Committee, be granted either alone or in addition to, in tandem
with, or in substitution or exchange for, any other Award or any
award granted under another plan of the Company, any subsidiary or
affiliate, or any business entity to be acquired by the Company or a
subsidiary or affiliate, or any other right of a Participant to
receive payment from the Company or any subsidiary or affiliate.
Awards granted in addition to or in tandem with other Awards or
awards may be granted either as of the same time as or a different
time from the grant of such other Awards or awards. Subject to
Section 10(j), the Committee may determine that, in granting a new
Award, the in-the-money value or other value of any surrendered
Award or award may be applied to reduce the exercise price of any
Option, grant price of any SAR, or purchase price of any other
Award.
(b) Term of Awards. The term of each Award shall be for such
period as may be determined by the Committee.
(c) Form and Timing of Payment under Awards; Deferrals.
Subject to the terms of the Plan (including Section 10(j)) and any
applicable Award document, payments to be made by the Company or a
subsidiary or affiliate upon the exercise of an Option or other
Award or settlement of an Award may be made in such forms as the
Committee shall determine, including, without limitation, cash,
Stock, other Awards or other property, and may be made in a single
payment or transfer, in installments, or on a deferred basis. The
settlement of any Award may be accelerated, and cash paid in lieu of
Stock in connection with such settlement, in the discretion of the
Committee or upon occurrence of one or more specified events
(subject to Section 10(j)). Installment or deferred payments may be
required by the Committee (subject to Section 10(e)) or permitted at
the election of the Participant on terms and conditions established
by the Committee. Payments may include, without limitation,
provisions for the payment or crediting of reasonable interest on
installment or deferred payments or the grant or crediting of
Dividend Equivalents or other amounts in respect of installment or
deferred payments denominated in Stock.
(d) Loan Provisions. With the consent of the Committee, and
subject at all times to, and only to the extent, if any, permitted
under and in accordance with, laws and regulations and other binding
obligations or provisions applicable to the Company (including
applicable margin regulations), the Company may make, guarantee, or
arrange for a loan or loans to a Participant with respect to the
exercise of any Option or other payment in connection with any
Award, including the payment by a Participant of any or all federal,
state, or local income or other taxes due in connection with any
Award. Subject to such limitations, the Committee shall have full
authority to decide whether to make a loan or loans hereunder and to
determine the amount, terms, and provisions of any such loan or
loans, including the interest rate, if any, to be charged in respect
of any such loan or loans, whether the loan or loans are to be with
or without recourse against the borrower, the terms on which the
loan is to be repaid and conditions, if any, under which the loan or
loans may be forgiven.
8. CHANGE IN CONTROL.
(a) Effect of "Change in Control" on Non-Performance Based
Awards. In the event of a "Change in Control," the following
provisions shall apply to non-performance based Awards, including
Awards as to which performance conditions previously have been
satisfied or are deemed satisfied under Section 8(b), unless
otherwise provided by the Committee in the Award document:
(i) All deferral of settlement, forfeiture conditions
and other restrictions applicable to Awards granted under the
Plan shall lapse and such Awards shall be fully payable as of
the time of the Change in Control without regard to deferral
and vesting conditions, except to the extent of any waiver by
the Participant or other express election to defer beyond a
Change in Control and subject to applicable restrictions set
forth in Section 10(a);
(ii) Any Award carrying a right to exercise that was
not previously exercisable and vested shall become fully
exercisable and vested as of the time of the Change in
Control, subject only to applicable restrictions set forth in
Section 10(a); and
(iii) The Committee may, in its discretion, determine
to extend to any Participant who holds an Option the right to
elect, during the 60-day period immediately following the
Change in Control, in lieu of acquiring the shares of Stock
covered by such Option, to receive in cash the excess of the
Change in Control Price over the exercise price of such
Option, multiplied by the number of shares of Stock covered
by such Option, and to extend to any Participant who holds
other types of Awards denominated in shares the right to
elect, during the 60-day period immediately following the
Change in Control, in lieu of receiving the shares of Stock
covered by such Award, to receive in cash the Change in
Control Price multiplied by the number of shares of Stock
covered by such Award.
(b) Effect of "Change in Control" on Performance-Based
Awards. In the event of a "Change in Control," with respect to an
outstanding Award subject to achievement of performance goals and
conditions, such performance goals and conditions shall be deemed to
be met or exceeded if and to the extent so provided by the Committee
in the Award document governing such Award or other agreement with
the Participant.
(c) Definition of "Change in Control." A "Change in Control"
shall be deemed to have occurred if, after the Effective Date, there
shall have occurred any of the following:
(i) Any "person," as such term is used in Section 13(d)
and 14(d) of the Exchange Act (other than the Company, any
trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or any company owned,
directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of
stock of the Company), acquires voting securities of the
Company and immediately thereafter is a "40% Beneficial
Owner." For purposes of this provision, a "40% Beneficial
Owner" shall mean a person who is the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 40% or
more of the combined voting power of the Company's
then-outstanding voting securities; provided, however, that
the term "40% Beneficial Owner" shall not include any person
who was a beneficial owner of outstanding voting securities
of the Company at February 20, 1990, or any person or persons
who was or becomes a fiduciary of any such person or persons
who is, or in the aggregate, are a "40% Beneficial Owner" (an
"Existing Shareholder"), including any group that may be
formed which is comprised solely of Existing Shareholders,
unless and until such time after February 20, 1990 as any
such Existing Shareholder shall have become the beneficial
owner (other than by means of a stock dividend, stock split,
gift, inheritance or receipt or exercise of, or accrual of
any right to exercise, a stock option granted by the Company
or receipt or settlement of any other stock-related award
granted by the Company) by purchase of any additional voting
securities of the Company; and provided further, that the
term "40% Beneficial Owner" shall not include any person who
shall become the beneficial owner of 40% or more of the
combined voting power of the Company's then-outstanding
voting securities solely as a result of an acquisition by the
Company of its voting securities, until such time thereafter
as such person shall become the beneficial owner (other than
by means of a stock dividend or stock split) of any
additional voting securities and becomes a 40% Beneficial
Owner in accordance with this Section 8(c)(i);
(ii) Individuals who on September 1, 2000 constitute
the Board, and any new director (other than a director whose
initial assumption of office is in connection with an actual
or threatened election consent, including but not limited to
a consent solicitation, relating to the election of directors
of the Company) whose election by the Board or nomination for
election by the Company's shareholders was approved by a vote
of at least two-thirds (2/3) of the directors then still in
office who either were directors on September 1, 2000 or
whose election or nomination for election was previously so
approved or recommended, cease for any reason to constitute
at least a majority thereof;
(iii) There is consummated a merger, consolidation,
recapitalization, or reorganization of the Company, or a
reverse stock split of any class of voting securities of the
Company, if, immediately following consummation of any of the
foregoing, either (A) individuals who, immediately prior to
such consummation, constitute the Board do not constitute at
least a majority of the members of the board of directors of
the Company or the surviving or parent entity, as the case
may be, or (B) the voting securities of the Company
outstanding immediately prior to such recommendation do not
represent (either by remaining outstanding or by being
converted into voting securities of a surviving or parent
entity) at least 60% or more of the combined voting power of
the outstanding voting securities of the Company or such
surviving or parent entity; or
(iv) The shareholders of the Company have approved a
plan of complete liquidation of the Company or there is
consummated an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets
(or any transaction have a similar effect).
(d) Definition of "Change in Control Price." The "Change in
Control Price" means an amount in cash equal to the higher of (i)
the amount of cash and fair market value of property that is the
highest price per share paid (including extraordinary dividends) in
any transaction triggering the Change in Control or any liquidation
of shares following a sale of substantially all assets of the
Company, or (ii) the highest Fair Market Value per share at any time
during the 60-day period preceding and 60-day period following the
Change in Control.
9. ADDITIONAL AWARD FORFEITURE PROVISIONS.
(a) Forfeiture of Options and Other Awards and Gains Realized
Upon Prior Option Exercises or Award Settlements. Unless otherwise
determined by the Committee, each Award granted hereunder shall be
subject to the following additional forfeiture conditions, to which
the Participant, by accepting an Award hereunder, agrees. If any of
the events specified in Section 9(b)(i), (ii), or (iii) occurs (a
"Forfeiture Event"), all of the following forfeitures will result:
(i) The unexercised portion of the Option, whether or
not vested, and any other Award not then settled (except for
an Award that has not been settled solely due to an elective
deferral by the Participant and otherwise is not forfeitable
in the event of any termination of service of the
Participant) will be immediately forfeited and canceled upon
the occurrence of the Forfeiture Event; and
(ii) The Participant will be obligated to repay to the
Company, in cash, within five business days after demand is
made therefor by the Company, the total amount of Award Gain
(as defined herein) realized by the Participant upon each
exercise of an Option or settlement of an Award (regardless
of any elective deferral) that occurred on or after (A) the
date that is six months prior to the occurrence of the
Forfeiture Event, if the Forfeiture Event occurred while the
Participant was employed by the Company or a subsidiary or
affiliate, or (B) the date that is six months prior to the
date the Participant's employment by the Company or a
subsidiary or affiliate terminated, if the Forfeiture Event
occurred after the Participant ceased to be so employed. For
purposes of this Section, the term "Award Gain" shall mean
(i), in respect of a given Option exercise, the product of
(X) the Fair Market Value per share of Stock at the date of
such exercise (without regard to any subsequent change in the
market price of shares) minus the exercise price times (Y)
the number of shares as to which the Option was exercised at
that date, and (ii), in respect of any other settlement of an
Award granted to the Participant, the Fair Market Value of
the cash or Stock paid or payable to Participant (regardless
of any elective deferral) less any cash or the Fair Market
Value of any Stock or property (other than an Award or award
which would have itself then been forfeitable hereunder and
excluding any payment of tax withholding) paid by the
Participant to the Company as a condition of or in connection
such settlement.
(b) Events Triggering Forfeiture. The forfeitures specified
in Section 9(a) will be triggered upon the occurrence of any one of
the following Forfeiture Events at any time during the Participant's
employment by the Company or a subsidiary or affiliate or during the
one-year period following termination of such employment:
(i) The Participant, acting alone or with others,
directly or indirectly, prior to a Change in Control, (A)
engages, either as employee, employer, consultant, advisor,
or director, or as an owner, investor, partner, or
shareholder unless the Participant's interest is
insubstantial, in any business in an area or region in which
the Company conducts business at the date the event occurs,
which is directly in competition with a business then
conducted by the Company or a subsidiary or affiliate; (B)
induces any customer or supplier of the Company or a
subsidiary or affiliate, or other company with which the
Company or a subsidiary or affiliate has a business
relationship, to curtail, cancel, not renew, or not continue
his or her or its business with the Company or any subsidiary
or affiliate; or (C) induces, or attempts to influence, any
employee of or service provider to the Company or a
subsidiary or affiliate to terminate such employment or
service. The Committee shall, in its discretion, determine
which lines of business the Company conducts on any
particular date and which third parties may reasonably be
deemed to be in competition with the Company. For purposes of
this Section 9(b)(i), a Participant's interest as a
shareholder is insubstantial if it represents beneficial
ownership of less than five percent of the outstanding class
of stock, and a Participant's interest as an owner, investor,
or partner is insubstantial if it represents ownership, as
determined by the Committee in its discretion, of less than
five percent of the outstanding equity of the entity;
(ii) The Participant discloses, uses, sells, or
otherwise transfers, except in the course of employment with
or other service to the Company or any subsidiary or
affiliate, any confidential or proprietary information of the
Company or any subsidiary or affiliate, including but not
limited to information regarding the Company's current and
potential customers, organization, employees, finances, and
methods of operations and investments, so long as such
information has not otherwise been disclosed to the public or
is not otherwise in the public domain, except as required by
law or pursuant to legal process, or the Participant makes
statements or representations, or otherwise communicates,
directly or indirectly, in writing, orally, or otherwise, or
takes any other action which may, directly or indirectly,
disparage or be damaging to the Company or any of its
subsidiaries or affiliates or their respective officers,
directors, employees, advisors, businesses or reputations,
except as required by law or pursuant to legal process; or
(iii) The Participant fails to cooperate with the
Company or any subsidiary or affiliate by making himself or
herself available to testify on behalf of the Company or such
subsidiary or affiliate in any action, suit, or proceeding,
whether civil, criminal, administrative, or investigative, or
otherwise fails to assist the Company or any subsidiary or
affiliate in any such action, suit, or proceeding by
providing information and meeting and consulting with members
of management of, other representatives of, or counsel to,
the Company or such subsidiary or affiliate, as reasonably
requested.
(c) Agreement Does Not Prohibit Competition or Other
Participant Activities. Although the conditions set forth in this
Section 9 shall be deemed to be incorporated into an Award, a
Participant is not thereby prohibited from engaging in any activity,
including but not limited to competition with the Company and its
subsidiaries and affiliates. Rather, the non-occurrence of the
Forfeiture Events set forth in Section 9(b) is a condition to the
Participant's right to realize and retain value from his or her
compensatory Options and Awards, and the consequence under the Plan
if the Participant engages in an activity giving rise to any such
Forfeiture Event are the forfeitures specified herein. The Company
and the Participant shall not be precluded by this provision or
otherwise from entering into other agreements concerning the subject
matter of Section 9(a) and 9(b).
(d) Committee Discretion. The Committee may, in its
discretion, waive in whole or in part the Company's right to
forfeiture under this Section, but no such waiver shall be effective
unless evidenced by a writing signed by a duly authorized officer of
the Company. In addition, the Committee may impose additional
conditions on Awards, by inclusion of appropriate provisions in the
document evidencing or governing any such Award.
10. GENERAL PROVISIONS.
(a) Compliance with Legal and Other Requirements. The Company
may, to the extent deemed necessary or advisable by the Committee,
postpone the issuance or delivery of Stock or payment of other
benefits under any Award until completion of such registration or
qualification of such Stock or other required action under any
federal or state law, rule or regulation, listing or other required
action with respect to any stock exchange or automated quotation
system upon which the Stock or other securities of the Company are
listed or quoted, or compliance with any other obligation of the
Company, as the Committee may consider appropriate, and may require
any Participant to make such representations, furnish such
information and comply with or be subject to such other conditions
as it may consider appropriate in connection with the issuance or
delivery of Stock or payment of other benefits in compliance with
applicable laws, rules, and regulations, listing requirements, or
other obligations. The foregoing notwithstanding, in connection with
a Change in Control, the Company shall take or cause to be taken no
action, and shall undertake or permit to arise no legal or
contractual obligation, that results or would result in any
postponement of the issuance or delivery of Stock or payment of
benefits under any Award or the imposition of any other conditions
on such issuance, delivery or payment, to the extent that such
postponement or other condition would represent a greater burden on
a Participant than existed on the 90th day preceding the Change in
Control.
(b) Limits on Transferability; Beneficiaries. No Award or
other right or interest of a Participant under the Plan shall be
pledged, hypothecated or otherwise encumbered or subject to any
lien, obligation or liability of such Participant to any party
(other than the Company or a subsidiary or affiliate thereof), or
assigned or transferred by such Participant, and such Awards or
rights that may be exercisable shall be exercised during the
lifetime of the Participant only by the Participant or his or her
guardian or legal representative, except that (i) Awards and related
rights shall be transferred to a Participant's Beneficiary or
Beneficiaries upon the death of the Participant, and (ii) Awards and
other rights may be transferred to one or more Beneficiaries during
the lifetime of the Participant, and rights thereunder may be
exercised by such transferees in accordance with the terms of such
Award, but only if and to the extent such transfers are then
permitted by the Committee, subject to any terms and conditions
which the Committee may impose thereon (including limitations the
Committee may deem appropriate in order that offers and sales under
the Plan will meet applicable requirements of registration forms
under the Securities Act of 1933 specified by the Securities and
Exchange Commission). A Beneficiary or other person claiming any
rights under the Plan from or through any Participant shall be
subject to all terms and conditions of the Plan and any Award
document applicable to such Participant, except as otherwise
determined by the Committee, and to any additional terms and
conditions deemed necessary or appropriate by the Committee.
(c) Adjustments. In the event that any large, special and
non-recurring dividend or other distribution (whether in the form of
cash or property other than Stock), recapitalization, forward or
reverse split, Stock dividend, reorganization, merger,
consolidation, spin-off, combination, repurchase, share exchange,
liquidation, dissolution or other similar corporate transaction or
event affects the Stock such that an adjustment is determined by the
Committee to be appropriate under the Plan, then the Committee
shall, in such manner as it may deem equitable, adjust any or all of
(i) the number and kind of shares of Stock which may be delivered in
connection with Awards granted thereafter, (ii) the number and kind
of shares of Stock subject to or deliverable in respect of
outstanding Awards, (iii) any fixed market price of Common Stock
referred to in a performance condition or otherwise incorporated as
a term of an Award, and (iv) the exercise price, grant price or
purchase price relating to any Award or, if deemed appropriate, the
Committee may make provision for a payment of cash or property to
the holder of an outstanding Option (subject to Section 10(j)). In
addition, the Committee is authorized to make adjustments in the
terms and conditions of, and the criteria included in, Awards
(including Performance Awards and performance goals relating
thereto) in recognition of unusual or nonrecurring events
(including, without limitation, events described in the preceding
sentence, as well as acquisitions and dispositions of businesses and
assets) affecting the Company, any subsidiary or affiliate or other
business unit, or the financial statements of the Company or any
subsidiary or affiliate, or in response to changes in applicable
laws, regulations, accounting principles, tax rates and regulations
or business conditions or in view of the Committee's assessment of
the business strategy of the Company, any subsidiary or affiliate or
business unit thereof, performance of comparable organizations,
economic and business conditions, personal performance of a
Participant, and any other circumstances deemed relevant.
(d) Tax Provisions.
(i) Withholding. The Company and any subsidiary or
affiliate is authorized to withhold from any Award granted,
any payment relating to an Award under the Plan, including
from a distribution of Stock, or any payroll or other payment
to a Participant, amounts of withholding and other taxes due
or potentially payable in connection with any transaction
involving an Award, and to take such other action as the
Committee may deem advisable to enable the Company and
Participants to satisfy obligations for the payment of
withholding taxes and other tax obligations relating to any
Award. This authority shall include authority to withhold or
receive Stock or other property and to make cash payments in
respect thereof in satisfaction of a Participant's
withholding obligations, either on a mandatory or elective
basis in the discretion of the Committee. Other provisions of
the Plan notwithstanding, only the minimum amount of Stock
deliverable in connection with an Award necessary to satisfy
statutory withholding requirements will be withheld.
(ii) Required Consent to and Notification of Code
Section 83(b) Election. No election under Section 83(b) of
the Code (to include in gross income in the year of transfer
the amounts specified in Code Section 83(b)) or under a
similar provision of the laws of a jurisdiction outside the
United States may be made unless expressly permitted by the
terms of the Award document or by action of the Committee in
writing prior to the making of such election. In any case in
which a Participant is permitted to make such an election in
connection with an Award, the Participant shall notify the
Company of such election within ten days of filing notice of
the election with the Internal Revenue Service or other
governmental authority, in addition to any filing and
notification required pursuant to regulations issued under
Code Section 83(b) or other applicable provision.
(e) Changes to the Plan. The Board may amend, suspend or
terminate the Plan or the Committee's authority to grant Awards
under the Plan without the consent of shareholders or Participants;
provided, however, that, without the consent of an affected
Participant, no such Board action may materially and adversely
affect the rights of such Participant under any outstanding Award.
The Committee shall have no authority to waive or modify any other
Award term after the Award has been granted to the extent that the
waived or modified term was mandatory under the Plan.
(f) Right of Setoff. The Company or any subsidiary or
affiliate may, to the extent permitted by applicable law, deduct
from and set off against any amounts the Company or a subsidiary or
affiliate may owe to the Participant from time to time, including
amounts payable in connection with any Award, owed as wages, fringe
benefits, or other compensation owed to the Participant, such
amounts as may be owed by the Participant to the Company, including
but not limited to amounts owed under Section 9(a), although the
Participant shall remain liable for any part of the Participant's
payment obligation not satisfied through such deduction and setoff.
By accepting any Award granted hereunder, the Participant agrees to
any deduction or setoff under this Section 10(f).
(g) Unfunded Status of Awards; Creation of Trusts. The Plan
is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to
a Participant or obligation to deliver Stock pursuant to an Award,
nothing contained in the Plan or any Award shall give any such
Participant any rights that are greater than those of a general
creditor of the Company; provided that the Committee may authorize
the creation of trusts and deposit therein cash, Stock, other Awards
or other property, or make other arrangements to meet the Company's
obligations under the Plan. Such trusts or other arrangements shall
be consistent with the "unfunded" status of the Plan unless the
Committee otherwise determines with the consent of each affected
Participant.
(h) Nonexclusivity of the Plan. Neither the adoption of the
Plan by the Board nor its submission to the shareholders of the
Company for approval shall be construed as creating any limitations
on the power of the Board or a committee thereof to adopt such other
incentive arrangements, apart from the Plan, as it may deem
desirable, and such other arrangements may be either applicable
generally or only in specific cases.
(i) Payments in the Event of Forfeitures; Fractional Shares.
Unless otherwise determined by the Committee, in the event of a
forfeiture of an Award with respect to which a Participant paid cash
consideration, the Participant shall be repaid the amount of such
cash consideration. No fractional shares of Stock shall be issued or
delivered pursuant to the Plan or any Award. The Committee shall
determine whether cash, other Awards or other property shall be
issued or paid in lieu of such fractional shares or whether such
fractional shares or any rights thereto shall be forfeited or
otherwise eliminated.
(j) Certain Limitations Relating to Accounting Treatment of
Awards. Other provisions of the Plan notwithstanding, the
Committee's authority under the Plan (including under Sections 7(c),
7(d), 10(c) and 10(d)) is limited to the extent necessary to ensure
that any Option or other Award of a type that the Committee has
intended to be subject to fixed accounting with a measurement date
at the date of grant or the date performance conditions are
satisfied under APB 25 shall not become subject to "variable"
accounting solely due to the existence of such authority, unless the
Committee specifically determines that the Award shall remain
outstanding despite such "variable" accounting. In addition, other
provisions of the Plan notwithstanding, (i) if any right under this
Plan would cause a transaction to be ineligible for
pooling-of-interests accounting that would, but for the right
hereunder, be eligible for such accounting treatment, such right
shall be automatically adjusted so that pooling-of-interests
accounting shall be available, including by substituting Stock or
cash having a Fair Market Value equal to any cash or Stock otherwise
payable in respect of any right to cash which would cause the
transaction to be ineligible for pooling-of-interests accounting,
and (ii) if any authority under Section 8(c) would cause a
transaction to be ineligible for pooling-of-interests accounting
that would, but for such authority, be eligible for such accounting
treatment, such authority shall be limited to the extent necessary
so that such transaction would be eligible for pooling-of-interests
accounting.
(k) Governing Law. The validity, construction, and effect of
the Plan, any rules and regulations relating to the Plan and any
Award document shall be determined in accordance with the laws of
the State of New York, without giving effect to principles of
conflicts of laws, and applicable provisions of federal law.
(l) Awards to Participants Outside the United States. The
Committee may modify the terms of any Award under the Plan made to
or held by a Participant who is then resident or primarily employed
outside of the United States in any manner deemed by the Committee
to be necessary or appropriate in order that such Award shall
conform to laws, regulations, and customs of the country in which
the Participant is then resident or primarily employed, or so that
the value and other benefits of the Award to the Participant, as
affected by foreign tax laws and other restrictions applicable as a
result of the Participant's residence or employment abroad shall be
comparable to the value of such an Award to a Participant who is
resident or primarily employed in the United States. An Award may be
modified under this Section 10(l) in a manner that is inconsistent
with the express terms of the Plan, so long as such modifications
will not contravene any applicable law or regulation.
(m) Limitation on Rights Conferred under Plan. Neither the
Plan nor any action taken hereunder shall be construed as (i) giving
any Eligible Person or Participant the right to continue as an
Eligible Person or Participant or in the employ or service of the
Company or a subsidiary or affiliate, (ii) interfering in any way
with the right of the Company or a subsidiary or affiliate to
terminate any Eligible Person's or Participant's employment or
service at any time, (iii) giving an Eligible Person or Participant
any claim to be granted any Award under the Plan or to be treated
uniformly with other Participants and employees, or (iv) conferring
on a Participant any of the rights of a shareholder of the Company
unless and until the Participant is duly issued or transferred
shares of Stock in accordance with the terms of an Award or an
Option is duly exercised. Except as expressly provided in the Plan
and an Award document, neither the Plan nor any Award document shall
confer on any person other than the Company and the Participant any
rights or remedies thereunder.
(n) Severability; Entire Agreement. If any of the provisions
of this Plan or any Award document is finally held to be invalid,
illegal or unenforceable (whether in whole or in part), such
provision shall be deemed modified to the extent, but only to the
extent, of such invalidity, illegality or unenforceability, and the
remaining provisions shall not be affected thereby; provided, that,
if any of such provision is finally held to be invalid, illegal, or
unenforceable because it exceeds the maximum scope determined to be
acceptable to permit such provision to be enforceable, such
provision shall be deemed to be modified to the minimum extent
necessary to modify such scope in order to make such provision
enforceable hereunder. The Plan and any Award documents contain the
entire agreement of the parties with respect to the subject matter
thereof and supersede all prior agreements, promises, covenants,
arrangements, communications, representations and warranties between
them, whether written or oral with respect to the subject matter
thereof.
(o) Plan Effective Date and Termination. The Plan shall
become effective at November 14, 2000. Unless earlier terminated by
action of the Board of Directors, the Plan will remain in effect
until such time as no Stock remains available for delivery under the
Plan and the Company has no further rights or obligations under the
Plan with respect to outstanding Awards under the Plan.
